A new report shows that Amazon is now the second-biggest player in consumer-electronics sales, leaving Walmart in the tech dust. And while BestBuy retains No. 1 ranking, and in fact slowed its market-share loss to the lowest level in years, it may be next.
Writing about the new industry ranking from This Week in Consumer Electronics (TWICE), Deutsche Bank analyst Mike Baker notes that the category’s big gains overall — total sales increased 4.3% in 2015, its best year since the 5.2% increase it scored back in 2011 — are almost entirely created by Amazon. “Amazon contributed $5.1 billion of the $5.6 billion increase,” he writes, “representing 90% of total industry growth.”
Those gains gave Amazon its largest market-share growth in the 12 years Deutsche has been tracking it, while Best Buy’s share loss slowed, “and is now almost flat with last year.” In dollar spending, the Minneapolis-based BestBuy made gains that are “almost identical to RadioShack’s dollar loss, so it appears this was the major source of dollar growth.”
Among the top 25 companies, just nine managed to increase dollar growth, and only two — Amazon and Costco — registered advances in market share. For the first time, even Apple stalled, with its share remaining flat.
But BestBuy, meanwhile, isn’t sitting still. The Minneapolis Star-Tribune reports the company is testing a new in-home consulting service. While its Geek Squad already installs and repairs some consumer electronics in people’s home, the new service is broader, helping consumers with issues like boosting Internet speed to using connected home-devices.
In its most recent quarterly results, BestBuy posted stronger-than-expected revenues and profits, and says it is focusing on initiatives “to drive future growth and differentiation. We are investing to make it easy for customers to learn about and enjoy the latest technology as they pursue their passions and take care of what is important to them in their lives,” says Hubert Joly, chairman and CEO, in its release. “With our combination of digital, store and in-home assets, we feel we have a great opportunity to address key customer pain points, build stronger ongoing relationships with our customers and unleash growth opportunities.”